ZENN Motor Company Inc.

ZENN Motor Company Inc.

December 17, 2014 11:24 ET

Zenn Motor Company Announces Results of Independent Testing on EEStor Technology

TORONTO, ONTARIO--(Marketwired - Dec. 17, 2014) - ZENN Motor Company Inc. (TSX VENTURE:ZNN) ("ZENN" or the "Company"), today announced the findings of four independent reports on the testing of the capacitor technology developed by its 71.3% owned subsidiary, EEStor Inc. ("EEStor").

The reports are available for viewing at www.zenncars.com or at www.eestor.us. These materials are also available for viewing at www.sedar.com.

Intertek Group plc ("Intertek") rigorously tested an extensive sampling of EEStor capacitor layers across multiple voltages (250vdc, 450vdc, 700vdc, 1000vdc and 1500vdc) using its own equipment and testing protocols. In addition, a 250vdc, six-layer injection molded part was fully tested to demonstrate the performance and stability of an assembled multi-layer part.

Key highlights and findings of the Intertek report include:

  1. Capacitance remains constant across multiple voltages and frequencies.
  2. A sampling of commercially available Aluminum Electrolytic capacitors hi-pot tested to approximately 32% above rated voltage, whereas EEStor parts in the same voltage range tested to approximately 112% above the rated layer voltage.
  3. Leakage current is better than tested commercially available Aluminium Electrolytic (AE) capacitors.
  4. EEStor capacitors are non-polar and show the same capacitance or resistance regardless of polarity.
  5. All EEStor samples were charged in milliseconds without any noted degradation of performance.
  6. As the comparative data illustrates, the cumulative effects of the layered EEStor part appear to be well beyond the simple additive values.
  7. The layered EEStor part is injection molded in polypropylene to ensure a full hermetic seal.
  8. The resistance and capacitance levels of the dried high voltage parts indicate exceptional performance and provide for additional volumetric efficiencies over parts compromised by humidity.
  9. Volumetric benefits of EEStor's technology are seen throughout the voltages tested and become even more apparent at higher voltages.
  10. The EEStor capacitor technology is significantly smaller than incumbent technology with similar performance characteristics.
  11. Hi-pot testing indicated up to the following volts per micron capacities of the EEStor parts at these voltages:
    • 250VDC: Hi-pot value of 930VDC/thickness of part tested (13 microns) = volts per micron of: 71VDC
    • 450VDC: Hi-pot value of 1130VDC/thickness of part tested (14 microns) = volts per micron of: 81VDC
    • 700VDC: Hi-pot value of 1360VDC/thickness of part tested (18 microns) = volts per micron of: 76VDC
    • 1000VDC: Hi-pot value of 1890VDC/thickness of part tested (22 microns) = volts per micron of: 86VDC
    • 1500VDC: Hi-pot value of 2440VDC/thickness of part tested (29 microns) = volts per micron of: 84VDC

Ian Clifford, Founder and CEO of ZENN and the President and CEO of EEStor stated: "The independent testing by Intertek represents an important validation of the potential of EEStor's technology for capacitor applications and confirms internal testing results achieved by EEStor. The Company and its stakeholders will benefit from the comprehensive protocols and procedures developed by Intertek at its facility in Dallas, Texas to ensure that the test results are complete and accurate. The work took several months to complete, and now allows the Company to begin to pursue commercial partnerships based on the independent data and comparative testing against existing incumbent technologies."

Clifford continued: "We also sought out a globally recognized expert to advise ZENN and EEStor in prioritizing the business opportunities that the test results make available. Mr. Dennis Zogbi, CEO and Founder of Paumanok Publications, Inc. ("Paumanok") brings over 25 years of in-depth capacitor industry knowledge as a leading consultant with major global capacitor companies. As a result of the positive Intertek testing, the parties intend to continue working together to identify and develop strategic relationships in the capacitor industry."

Key highlights of the Paumanok Report include:

  • The current status of EEStor's technology indicates that the initial commercial targets, in order of priority, should be:
    • High Voltage Aluminum Electrolytic and Tantalum capacitors (combined total worldwide 2014 market of USD $6 billion)
    • The power film capacitor segment (combined total worldwide 2014 market of USD $1.3 billion)
    • The direct sale of the composition modified barium titanate powders manufactured at EEStor to capacitor manufacturer customers worldwide (total 2014 worldwide market of USD $83 million)
  • The report from Paumanok, which relies on the results obtained by Intertek and its report, concludes that "the unique combination of both high capacitance and high voltage characteristics evident in the EEStor capacitor layers are unique and should be considered particularly disruptive to the $6 billion electrolytic segment of the worldwide capacitor industry today." In addition, the Paumanok report states that "the Intertek report emphasized the superior performance of the EEStor capacitor layers when compared to that of traditional aluminum electrolytic capacitors. The added fact that the EEStor technology has an inherently lower cost structure when compared to aluminum capacitors makes the EEStor technology particularly disruptive to the global aluminum capacitor establishment." Paumanok recommends that the electrochemical capacitor segment should be targeted with emphasis upon segments of the market where the profitability is highest.

Stewart Somers, Chair of the ZENN and EEStor Boards of Directors concluded: "Since May 19th 2014, when Ian Clifford was reappointed as the CEO of ZENN and appointed as President and CEO of EEStor, our singular focus has been to place both organizations on a congruent path towards the commercialization of products based on credible and verifiable results of our market leading technologies. Ian will now lead the companies in expanding external commercial discussions with capacitor industry partners while EEStor completes plans for a high volume injection molding prototyping system. We will also add to the team in our Cedar Park operation, advanced polymer engineering expertise and related industry experience in order to further develop our platform technologies into other energy markets."

About ZENN Motor Company Inc.

ZENN's mission is to be the provider of leading edge energy storage solutions and related technologies. The Company operates on the principle and belief that a fundamental breakthrough in energy storage will be the catalyst for positive environmental and economic change globally. The Company's current business strategy is focussed on licensing and partnership opportunities across a broad spectrum of industries and applications building on its recent technology achievements in the capacitor industry.

The Company holds an approximate 71.3% equity and voting interest and certain technology rights to a solid-state capacitor and related energy storage technologies currently under development by EEStor, Inc. ("EEStor"). The acquisition of the controlling interest in EEStor aligns the businesses of both companies and now allows ZENN to benefit from other revenue streams that should be available to EEStor, including applications throughout the capacitor industry and not limited to high density energy storage applications.

EEStor's capacitor and energy storage technology is still under development and a number of further development milestones must be achieved before commercial viability can be fully established. There are significant risks associated with the development of new technologies such as EEStor's capacitor and energy storage technology and readers are directed to the "Risk Factors" disclosed in ZENN's most recent Annual Information Form filed on SEDAR.

Forward-looking Statements

Certain statements and documents referred to in this release, other than statements of historical fact, may include forward-looking information that involves various risks and uncertainties that face the Company; such statements may contain such words as "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, and may be based on management's current assumptions and expectations related to all aspects of the automotive industry, consumer demand for zero emission transportation solutions and the global economy. Risks and uncertainties that may face the Company include, but are not restricted to: the EEStor energy storage technology may not be successfully commercialized at all, in a manner providing the features and benefits expected while under development, or on a timely basis or the Company may not be able to successfully incorporate this technology into its current or proposed products or the products of others; steps taken by the Company to protect its proprietary rights may not be adequate or third parties may infringe or misappropriate the Company's proprietary rights; the Company has a history of losses from operations and may not be able to obtain financing, if and when required or on acceptable terms due to market conditions or other factors, to fund future expenditures for general administrative activities, including sales and marketing and research and development, expansion, strategic acquisitions or investment opportunities or to respond to competitive pressures; competitors may develop products which offer greater benefits to consumers, have greater market appeal or are more competitively priced than those offered by the Company; the Company may be exposed to product liability claims which exceed insurance policy limits; the Company is dependent on the ability and experience of a relatively small number of key personnel; new products introduced by the Company may not be accepted in the market or to the extent projected; new laws and regulations may be enacted or existing ones may be applied or governmental action may be taken in a manner which could limit or curtail the production or sale of the Company's products; and the Company may be negatively affected by reduced consumer spending due to the uncertainty of economic and geopolitical conditions. These risks and uncertainties may cause actual results to differ from information contained in this release, when estimates and assumptions have been used to measure and report results. There can be no assurance that any statements of forward-looking information contained in this release will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements.

These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Except as required by applicable laws, the Company assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change. Readers are cautioned not to place undue reliance on any statements of forward looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in the Company's most recently filed Annual Information Form and its other filings with the various Canadian securities regulators which are available online at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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